China Paying For Iranian Oil In Gold

Beijing is planning to stay away from U.S. monetary sanctions on Iran by paying out for oil with gold. China’s imports of the metal are already big, and you can guess what further purchases are going to do to prices.

On the last day of 2011, President Obama signed the National Defense Authorization Act for Fiscal Year 2012. The NDAA, as it is known as, attempts to reduce Iran’s income from the sale of petroleum by imposing sanctions on foreign monetary institutions conducting transactions with Iranian financial institutions in connection with these product sales. This provision, which essentially cuts off sanctioned institutions from the U.S. monetary system, will take impact on June 28.

The NDAA gives the president the power to waive the sanctions based on the availability and value of supplies from non-Iranian sources. He can also exempt financial institutions from countries that have substantially lower back purchases of Iranian petroleum. Last month, the State Department announced waivers for Japan and ten European countries. China, which has received American waivers in the past under other Iran legislation, is now Tehran’s largest oil consumer and investor as well as its largest trading companion.

Via: Forbes : So how can Beijing keep both Iran’s ayatollahs and President Obama happy at the same time? Simple, the Chinese can avoid the U.S. sanctions through barter. China has already been trading its produce for Iran’s petroleum, but there is only so much gai lan and bok choy the Iranians can eat.

Beijing is planning to avoid U.S. financial sanctions on Iran by paying for oil with gold. China’s imports of the metal are already large, and you can guess what additional purchases are going to do to prices. On the last day of 2011, President Obama signed the National Defense Authorization Act for Fiscal Year 2012.